Charpe, Matthieu and Kühn, Stefan (2012): Bargaining, Aggregate Demand and Employment.
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This paper depicts the negative impact of a falling labour share caused by reduced bargaining power of workers on aggregate demand and employment. Contrary to standard New Keynesian models, the presence of consumers not participating in financial markets (rule of thumb consumers) causes an immediate negative response of output and employment, which is amplified when the economy faces a lower bound on the nominal interest rate. Additionally, the paper shows that by supporting consumption demand, minimum wages might enhance output and employment.
|Item Type:||MPRA Paper|
|Original Title:||Bargaining, Aggregate Demand and Employment|
|Keywords:||Labour share, search and matching, aggregate demand, household heterogeneity|
|Subjects:||E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations; Cycles
E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E24 - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E21 - Consumption; Saving; Wealth
|Depositing User:||Stefan Kühn|
|Date Deposited:||20. Jul 2012 10:58|
|Last Modified:||15. Feb 2013 21:20|
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